Merchandise Inventories

6 Months Ended

Feb. 15, 2020

Inventory Disclosure [Abstract]

Merchandise Inventories

Note F – Merchandise Inventories

Merchandise inventories are stated at the lower of cost or market. Merchandise inventories include related purchasing, storage and handling costs. Inventory cost has been determined using the last-in, first-out (“LIFO”) method for domestic inventories and the weighted average cost method for Mexico and Brazil inventories. Due to historical price deflation on the Company’s merchandise purchases, the Company has exhausted its LIFO reserve balance. The Company’s policy is not to write up inventory in excess of replacement cost, which is based on average cost. The difference between LIFO cost and replacement cost, which has been slightly reduced due to recent price inflation on the Company’s merchandise purchases, was $354.7 million at February 15, 2020 and $404.9 million at August 31, 2019.